Just a clarifying point because the terminology can be confusing (actually, confusing on purpose) and I wouldn't want someone to get confused and make a mistake. What Izzy is referring to is usually referred to as a Money Market Mutual Fund that mutual fund companies or brokerage houses sell. These accounts are classified as investments, and technically could fall in value, and are NOT protected by FDIC.

It's so rare for these funds to lose money for their customers that when the Reserve Primary Money Market Mutual Fund actually lost money when a very big IOU from Lehman Brothers went belly up, that was arguably the tipping point that triggered the recent panic and credit freeze around the world.

To compete with these higher yielding but very safe mutual funds, banks long ago created Money Market Accounts with a name that sounds confusingly like the Money Market Mutual Funds to trick customers into thinking they are the same thing. These are bank accounts and are covered by FDIC, so if the bank goes belly up, you're fully protected up to the FDIC limit. You don't make as much interest as in a Money Market Mutual Fund, but they are very secure.